Three Types of Construction, What you need to know
Many people don’t realize that contracts fall into three categories: Lump Sum Tender, Construction Management or Design/Build. Depending on the details of your project, owners may opt for one category over another, so it’s important to know what type of contracting a job you need.
Lump Sum Tender involves the owner assuming responsibility to find and retain an Architect independently of the general contractor. The architect is responsible for designing the building and producing working drawings and specifications. When the architect is complete the design phase, the project is offered for general or invited lump sum tender to general contractors on a competitive basis.
Construction Management joins the owner, architect and any engineers, as well as the construction manager, in a team approach to construction. The owner is responsible for contracting all parties separately for fees based on services required. The construction manager prepares a budget and schedule from the Architect’s drawings and specifications. Fast tracking the project can be accomplished since some of the design work is done concurrently to the start of construction.
Design/Build companies take responsibility of contracting all parties involved in the project. Therefore, general contractors assume the task of retaining architects, engineers, and trade work. Design-build delivery methods have a number of variations, but most can be placed in one of two categories:
- Stipulated Price: in essence, the owner or client provides general construction requirements, types of spaces, and preferred construction materials, plus a total cost for how much they are willing to pay for construction of a particular building. Competing firms present proposals to illustrate conceptual designs and provide specifications for building systems to be provided at the client’s price.
- Construction Management: the client awards a contract to a construction manager on the basis of a fee. The construction manager designs the project and solicits bids from subcontractors and suppliers. The total of these bids plus the construction manager’s fee determines the total price the client pays for the building.
Tags: General Construction Tips
